Shell TradingShell TradingShell TradingShell Trading
BangkokBangkokBangkokBangkok31313131stststst Jan Jan Jan Jan 2011201120112011
Ming-Yee Lim
Environmental Products Origination Manager
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upon Shell or its affiliates, the economic risks and merits, as well as the legal, tax, and
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a transaction.
AgendaAgendaAgendaAgenda
1. Introduction to the Environmental Products Team at Shell Trading
2. Lessons learnt in the past from a Compliance Buyer’s perspective and what we can do to protect our risks
a) Regulatory uncertainties on project types, volumes and pricing
b) Factors that Compliance Buyers will consider when buying projects
Emissions Markets – Global Developments
Western Climate Initiative
EU Emissions Trading Scheme
Clean Development Mechanism
Japanese Emissions Trading Scheme
Joint Implementation
Initiative
Regional Greenhouse Gas Initiative (“RGGI”)
Australian CPRS
New Zealand Emissions Trading Scheme
Scheme
LondonLondonLondonLondon
Trading
CDM Origination
Marketing
Deal Structuring
BeijingBeijingBeijingBeijing
CDM Origination
CDM Project Management
JapanJapanJapanJapan
Business Development
Shell Global COShell Global COShell Global COShell Global CO2 2 2 2 Trading TeamTrading TeamTrading TeamTrading Team
HoustonHoustonHoustonHouston
Trading
Business Development
SingaporeSingaporeSingaporeSingapore
Trading and MarketingCDM Origination
DubaiDubaiDubaiDubaiCDM Origination
Group position managementGroup position managementGroup position managementGroup position management
� Manage EUR400m Group position in EU
� EUA-CER spread optimization
JV/Customer businessJV/Customer businessJV/Customer businessJV/Customer business
� Trading with over 150 counterparties
� 250m EUA customer portfolio
Global Emissions MarketGlobal Emissions MarketGlobal Emissions MarketGlobal Emissions Market ExpertiseExpertiseExpertiseExpertise
CDM originationCDM originationCDM originationCDM origination
� First counterparty to receive CER delivery
� Portfolio of over 45 projects
Proprietary tradingProprietary tradingProprietary tradingProprietary trading
� First ever EUA, exchange based RGGI
� Over 500k EUA/CER average daily trading
Lessons learnt in the past from a Compliance Buyer’s perspective Lessons learnt in the past from a Compliance Buyer’s perspective Lessons learnt in the past from a Compliance Buyer’s perspective Lessons learnt in the past from a Compliance Buyer’s perspective
● Examples of issues faced by a Compliance Buyer are:
a) CERs eligibility
b) Price risk
c) Delivery risk
Secondary CER Price volatilities result in price riskSecondary CER Price volatilities result in price riskSecondary CER Price volatilities result in price riskSecondary CER Price volatilities result in price risk
15.00
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Secondary CER Price
Secondary CER Price
Secondary CER Price
Secondary CER Price
1111
2222
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6666 7777 88881) CERs rise in line with bull-trend across
6) Small decline broadly explained by relative weakness in gas prices.
8) The CDM EB's decision to request investigation of HFC credits resulted in the expected massive supply cuts to be priced in here.
9) Droppedin power prices and EUA UK auctions started the downturn initially, followed by release of news from the Eurpoean Commission first announcing ban of HFC and N2O credits from
5) The utilities return to the buy side as forward-hedging of power sales resumes.
Series1, 10.99
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Secondary CER Price
Secondary CER Price
Secondary CER Price
Secondary CER Price
3) Banking crisis sees prices crash across all markets. CERs followed equity indices, which are viewed as a proxy to economic strength and therefore expected emissions.
4444
55559999
with bull-trend across the energy complex, which saw oil prices peak at $147.
2) CERs continue to move in line with energy complex as they retrace some of the gains.
7) Copenhagen provides some volatility, with initial optimism pushing prices upwards followed by a reduction as that faded.
credits from 1 Jan 2013
Delays to registration result in delivery risksDelays to registration result in delivery risksDelays to registration result in delivery risksDelays to registration result in delivery risks
Factors that a Compliance Buyer will take note ofFactors that a Compliance Buyer will take note ofFactors that a Compliance Buyer will take note ofFactors that a Compliance Buyer will take note of
1. CERs eligibility: China, India, Thailand and others?
2. Price structures: fixed price, floating price or both
3. Factors affecting price levels
Ms MingMs MingMs MingMs Ming----Yee LimYee LimYee LimYee Lim
Environmental Products Origination ManagerEnvironmental Products Origination ManagerEnvironmental Products Origination ManagerEnvironmental Products Origination Manager
Shell International Eastern Trading Company Shell International Eastern Trading Company Shell International Eastern Trading Company Shell International Eastern Trading Company
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